Conias v Chief Executive, Department of Natural Resources [1998] QLC 121

LAND COURT BRISBANE 8 OCTOBER 1998 Re: Determination of Unimproved Value - Local authority: BCC-Hamilton (AV97-336) Spero and Joan Conias v. Chief Executive, Department of Natural Resources D E C I S I O N Spero and Joan Conias have appealed against the determination by the Chief Executive of an unimproved value of $980,000 for a "Residential A" zoned parcel of land situated at 63 Alexandra Road, Ascot. The land is more particularly described as Lots 1-3 on RP 70591, Parish of Toombul, County of Stanley, containing an area of 3,490 m. The relevant date for the determination of the unimproved value is 1 October 1996 and the appellants contend within the Notice of Appeal for an unimproved value of $756,000. The land has been valued by the respondent Chief Executive as a large single unit dwelling site under the provisions of s.17(1) of the Valuation of Land Act 1944. The grounds of appeal, to which the appellants are limited in accordance with s.45(4) of the Act, read: "As the property has heritage significance, the increase in the unimproved capital value should have been in the same order as the increase in improved properties (18.11%), not as the increase in land. The subject property cannot be demolished due to its heritage significance." Before outlining the relevant evidence led in the case, I should comment that this decision has been delayed pending the outcome of an appeal to the Land Appeal Court against a decision of the learned President of this Court in Re: GV & DE Roberts v. Chief Executive, Department of Natural Resources (Appeal Ref V96-791) in the event that the Land Appeal Court finding may have some bearing on the outcome of this appeal. The Land Appeal Court decision was handed down in Cairns on 12 August 1998. That Court had before it for its consideration an appeal against the learned President's decision that the listing of an historical residential dwelling known as "Warringa" which is situated at 26 Cleveland Terrace, Melton Hill, in the [1998] QLC 121 -- 1 of 15 -- 2 City of Townsville, on the Heritage Register under the Queensland Heritage Act 1992 did not affect the unimproved value of the "Roberts" land since the Heritage Act listing did not prevent single unit residential use of the land, and this was the basis upon which the land was valued by the Chief Executive. The grounds of appeal to the Land Appeal Court in Roberts, inter alia, read: " 2. That the Learned Member erred at law when he failed to take into account or properly take into account the following matters: (a) the restrictions imposed upon the use and/or development of the subject land under the Queensland Heritage Act 1992; (b) the potential uses and/or developments of the comparative lands for single unit residential purposes which were possible by reason of the fact that such lands were not subject to the said restrictions under the Queensland Heritage Act 1992; (c) the fact that the market for sale of the subject land was limited to persons prepared to accept the restrictions imposed upon the land by the Queensland Heritage Act 1992 and to persons who wished to own and/or reside in the residential improvements presently erected on the subject land; (d) the diminution in value of the subject land as compared to the comparative lands which would result from the matters referred in sub- paragraphs (a), (b) and (c) hereof; (e) (not relevant); (f) (not relevant); (g) (not relevant); (h) (not relevant); (i) proper and usual valuation principles in order to determine the appropriate effect of the restrictions under the Queensland Heritage Act 1992 on the value of the subject land and its relative value to the comparative lands; (j) the fact that evidence of a ready demand for 'old Queenslander homes' is irrelevant to and/or not determinative of the market and/or demand for the particular house structure erected on the subject land together with its statutory restrictions on changes and/or repairs and/or alterations and/or demolition and/or redevelopment; (k) that the highest and best use of the subject land was single unit residential use free of the restrictions of the Queensland Heritage Act 1992 which were imposed on the subject land and that such Act -- 2 of 15 -- 3 prevented and/or adversely restricted such highest and best use of the subject land; (l) that the comparative lands were capable of being developed for their highest and best use of single unit residential purposes without the statutory restrictions which existed in respect of the subject land; (m) that the subject land could not be developed to its full potential for its highest and best use as single unit residential land and does not have any potential for further development for such highest and best use and its unimproved value must reflect that statutory restriction; (n) that the presence on the subject land of its residential improvements and its listing under the Queensland Heritage Act 1992 meant that the subject land was not available for unrestricted use for single unit residential purposes and it could not be valued by comparing it with vacant land suitable for such unrestricted use; (o) that the adjoining Lyons land which is merely classified by the National Trust of Australia was not subject to the restrictions of the Queensland Heritage Act 1992 or any other statutory restrictions on its development or use apart from its residential 3 zoning under the Town Planning Scheme and that accordingly it is not directly comparable to the subject land and/or its value is enhanced in comparison to the subject land; (p) that the residential 3 zoning of the surrounding lands with their actual developments or potential developments has a significant adverse effect upon the amenity of the subject land for single unit residential purposes. It was the respondent Chief Executive's case in Roberts that, while he was in agreement that the subject land is impacted by the Heritage Listing, he claims that the effect of Section 17 of the Valuation of Land Act 1944, requiring that the subject land be valued as a single residence site with any higher use of the land ignored, establishes its highest and best use. But because of the residential nature of the Heritage Listing, and in the absence of any direct sales evidence to demonstrate some detriment in the valuation as a consequence of such listing, the Respondent Chief Executive argued in Roberts that the Heritage Act had no effect upon the unimproved value of the subject land. For the appellant, Roberts, it was argued that, because of the Heritage Listing, the owner of the subject land does not have the same freedom for the use of the land that is inherent in a property free of any such heritage requirement. In allowing the Robert's appeal, the Land Appeal Court had this to say: " Such a statutory restriction is likely to vary from site to site, and may either have a positive or negative impact on the value of a Heritage listed -- 3 of 15 -- 4 property. However, what must be recognised is that such a statutory restriction does exist, and prima facie must impact on the resultant value of the property (underlining is mine). The consequence of the heritage listing is therefore a separate consideration to the effect of section 17 of the Valuation of Land Act which applies to all single residential sites." But on my reading of the Roberts' judgment, it was apparent that the Land Appeal Court was bereft of satisfactory market evidence to quantify what would be an appropriate allowance to make in valuation terms for what it found to be the negative effect on the valuation of the land. But the final passage in the "Appropriate Allowance for Detriment" segment of the judgment reads: " Borrowing the words of Devlin J in Biggin v. Purmanite (supra) this is a case where 'the court must do the best it can' and we have decided that, based on an unencumbered valuation of $180,000, an encumbered value of $160,000, rounded from a discount of 10% reflects our appreciation of the probable effect of loss of freedom of choice in the use and quiet enjoyment of the land content of 'Warringa'." But before considering the relevant evidence and submissions in this case, I might say that had I been presented with the same evidence and submissions in Roberts as was the learned President of this Court, I would have had no difficulty coming to a similar conclusion as did he. But the hierarchy of the judicial system and courts has to be respected, and as a Member of this Court sitting alone, I am bound in law to follow the finding of the Land Appeal Court that the State Heritage Listing of the Roberts property does deleteriously affect the unimproved value of the Roberts' land in comparison with its value derived from market transactions free from the blighting, as it were, by heritage listing. I now turn to the instant case. Mr Spero Conias was called in evidence and outlined at considerable length the history of the development of the appellants' property, upon which is erected a residence known as "Carfin" and which property is claimed by Mr Conias to be of heritage significance. I should comment now that should the subject land not have been developed with a house of such heritage significance, then Mr Conias does not take issue with a valuation of $980,000 for the land. Mr Conias told us that "Carfin" was originally built in the late 1880s by a Mr Thomas Sword on a large tract of land which then probably extended from Alexandra Road, Ascot through to the Eagle Farm Racecourse and down to the Brisbane River. In the 1930s, "Carfin" was purchased by a Dr McDonald, and was again sold in 1950 -- 4 of 15 -- 5 or in 1952 to a gentleman by the name of Alan Davidson who was at that time running for the Lord Mayoralship of Brisbane. Mr Davidson married into the Tristams soft drink family, and when he purchased "Carfin" his aim was to renovate the home for his family residence. But because he was running for Lord Mayor, Mr Conias believes he wanted a significant home in the area. But Mr Conias told us that Mr Davidson's renovation of the home caused considerable damage to it. He demolished all of the verandas and added new concrete verandas. But Mr Davidson died before he lived in the home. Because of death duties and the like, Mr Conias told us that "Carfin" had to be sold, and in 1955 or thereabouts it was purchased by the Baptist Union which then converted the property into a nursing home. The original "Carfin" dwelling was extended and the large bedrooms were divided into two rooms or even three rooms. The Union built large public eating rooms and considerably added to the original building by erecting possibly five times the original floor area of "Carfin" in the yard by building a hospital type structure. There were something like 24 apartments, a laundry wing, kitchens, etc. This was the structural state of the property when the appellants purchased it in 1988 for $1,000,000. But it was the Conias' intention to demolish the nursing home improvements on the land (which by then had fallen into complete disrepair) and to restore the original "Carfin" dwelling. After considerable difficult negotiations by themselves and their architect, the Brisbane City Council eventually approved of the demolition of the nursing home improvements and of the plans prepared for the restoration of "Carfin". Mr Conias told us that he has spent an estimated $3,000,000 or more on the restoration programme. Mr Conias says that the original "Carfin" home had a wine cellar downstairs almost the size of a ballroom. He converted this to a lounge/dining room combined, an office, with fireplaces in all rooms. The hallway has marble floors and walls and ceilings. A bathroom was installed downstairs in what was a library room. Upstairs there are three bedrooms, an en suite which was part of a veranda, a dressing room, verandas off the main bedroom and a large open attic. These renovations and alterations were made inside the original "Carfin" building. An extension to the original home was built and this contains a kitchen/family room combined, a billiard room, and a separate family room. Mr Conias estimates the extension floor area adds about one-quarter to the original floor area of "Carfin". Mr Conias recognises that "Carfin" is not entered on the Australian or on the Queensland Heritage Registers. But he says the building has been recognised by the -- 5 of 15 -- 6 Brisbane City Council as one which is of heritage significance since it is listed in a character statement issued by the Heritage Unit of the Brisbane City Council as such. A document showing the inclusion of the property within the Brisbane City Council listing (Exhibit 2) is in evidence and it is shown as a Category 1 property which, the document indicates, is a category within which a consent application to remove or demolish an existing building is likely to be refused. Additionally, it is submitted on behalf of the appellants that advice received from the Brisbane City Council from a Council architect (Michael Scott) (Exhibit 3) is to the effect that Council has been involved in development applications regarding "Carfin", and it considers the house to be of local heritage significance, and further that if an owner of the property wished to demolish or remove the house, an advertised planning application would be required. Council's further advice is that it would most likely refuse the application for demolition or removal. The same exhibit enclosed amendments to the Town Plan regarding these issues. Mr Conias' attention was drawn by Council in particular to point 7.2.6.3 in the amendments to the Town Plan pointing out that paragraph (b) excludes "heritage buildings" from being able to be approved for demolition or removal. It further advises that the only issue able to be appealed is whether the building is a "heritage building" or not, and as previously stated Council would consider 63 Alexandra Road to be a "heritage building". Mr Conias is firmly of the belief that if an application was made to Council for the demolition of "Carfin", it would in all probability result in the listing of the property on the State Heritage Register under the provisions of the Queensland Heritage Act 1992 (s.33(1) of the Act) which it must be said appears to have wider powers than does the Brisbane City Council in so far as the development of heritage properties is concerned. Mr Conias, who is a long-standing and experienced real estate agent, is of the opinion that the market value of heritage listed properties is deleteriously affected by the Brisbane City Council listing. In spite of his total capital outlay on "Carfin" of not less than $4,000,000, he considers the present fair market value is probably about the recent valuation of $3,200,000 made by real estate firm Knight Frank for the property. Knight Frank provided the valuation for Mr Conias for the purpose of obtaining insurance for the "Carfin" assets. The apportionment of the Knight Frank valuation is said by Mr Conias to be: -- 6 of 15 -- 7 Market Value of Property $3,200,000 Less Replacement Value of Home $2,510,000 Value of Land and Ground Improvements $690,000 Mr Conias told us that his idea of the added value of the ground improvements at "Carfin" was $300,000. As a result, he suggests, based on the Knight Frank valuation, the value of the "Carfin" land is $390,000. Mr Conias' estimated replacement cost of the ground improvements are: Excavation $40,000 Concrete slabs $30,000 Fully glassed tile pool $30,000 Tennis court $30,000 Brick wall fence enclosing the property on three sides $100,000 Front fence $40,000 Wrought iron gates $30,000 Concrete driveway $40,000 Kerbing $5,000 Landscaping and Plants $50,000 Garage $100,000 These replacement costs total $495,000, but Mr Conias is of the opinion that the added value of these ground improvements is the aforementioned sum of $300,000. Mr Conias provided the Court with a schedule showing his estimate of the annual operating expenses at "Carfin". It reads: Cleaning 40 hours per week (2,000/year approx) $31,200 * Gardening 30 hours per week (1,500/year approx) $20,000 ** Electricity $2,200 Rates $6,036 Water Rates $1,500 Insurance $3,824 *** Security $360 Repairs and Maintenance $10,000 Yearly Painting 20,000 Sinking Fund Medium Term $16,400 Sinking Fund Long Term $8,666 TOTAL $120,186 * Cleaning - Excluding owners contributions in excess of approx. 2,000 hours per annum @ $15/hour $30,000 ** Gardening - Excluding owners contributions in excess of 1,000 hours per annum -- 7 of 15 -- 8 @ $15/hour $15,000 *** We also confirm that the home is insured for a replacement value of $2,510,000. Mr Conias told us that owning a heritage house involves extra expenses on maintenance over and above those for a normal home. He says that you just do not have a house that is 10, 15, or 20 years' old. "Carfin" is about 100 years old. He says all the timber work is totally different. There is a magnificent old solid cedar staircase in the home and the cornices up in the ceiling are probably about 600 high and all are painted. In each cornice there would be about 40 stripes and there are 40 different colours on every cornice with gold leafing and the cornices in the original part of the house are in solid concrete rendered on site by making out a tin template and dragging it across. In the restoration of the house, the Conias' reproduced a 3 metre long hallway which was damaged, and it took four months to construct it in concrete in an identical way. The walls of the original house are double-skin brick on the outside with a cavity and brick on the inside with quite ornate corbels. Mr Conias believes he has done quite a good job with the extension but he couldn't build it as was "Carfin" in its original state. Mr Conias was asked during the course of his evidence about his estimated annual operating expense allowances for "Carfin". He told us that there is more cleaning involved over and above that required for a new home. He said for example that the staircase is 100 years old and built of Queensland cedar and it has to be waxed. Mr Conias says that the only insurance he could get on the house is from a company called Prestige Homes Australia and that his scheduled annual insurance cost is the premium he paid for insurance last November. With respect to the painting, Mr Conias employed a Mr Graham Franklin and he was there for four years and not on his own. He also had tradesmen there on and off. Mr Conias had Mr Franklin on an hourly rate because nobody would work on a contract to quote for painting on a house like "Carfin". Mr Conias did not expect the painting to take more time than three to six months at most. Ongoing maintenance is also involved, and so that he does not end up with another four-year paint job in 20 years, he envisages getting Mr Franklin back in five years' time to do further work, this being a five-year plan, and also in 15 years to do a 15-year plan working on the painting, so it is a matter of setting money aside each year which will be required to cover the painting -- 8 of 15 -- 9 costs at the end of the five and the fifteen year periods. This is the basis for Mr Conias' painting sinking fund terms. Mr Conias says the painting is very involved. For example, the ceilings in the home are very ornate, there is very deep cornice work, and rosettes on the ceilings. To paint one rosette where there could be 30 colours with gold leafing would take three to four weeks because the work is very intricate and ornate. Speaking generally, Mr Conias told us that he has spent hundreds of thousands of dollars on painting. Called in evidence by the appellants was Sweden Jade Harley, who is a practising registered valuer. Ms Harley values the subject land after taking into account what she considers to be the deleterious effect of it having a building upon it which is of heritage significance, at $355,000. This is her secondary method of valuation. To arrive at this valuation, Ms Harley has accepted the valuation put forward by valuers Knight Frank and has accepted that the replacement cost of the house would be about $2,500,000. But Ms Harley stressed that this was not only the opinion of Knight Frank. She also consulted a builder named John Stephens who specialise in character houses and his advice was that the home would be worth at least $2,500 per m to replace and the floor area is 972 m. It is to be noted in Ms Harley's evidence that Mr Stephens has not inspected "Carfin" internally. Ms Harley is of the opinion that the replacement cost of about $2,500,000 is a fair estimate particularly in the light of some things that Mr Conias pointed out to her about some of the materials used in the house which, she says, cannot be found today. However, this is not Ms Harley's primary method or valuation although she says the method was accepted by the Land Appeal Court in the Ballow Chambers case (1992-3) 14 QLCR 422. Her reason for this is that there has been an absence of sales she considers to be comparable with the subject property. Ms Harley has prepared a schedule of her estimated annual maintenance cost of a new rendered brick home of the size of "Carfin". It reads: Cleaning 40 hours per week (2,000/year approx) $15,000 Gardening 30 hours per week (1,500/year approx) $20,000 Electricity $2,200 Rates $6,036 Water Rates $1,500 Insurance $740 Security $360 Repairs and Maintenance $7,290 Yearly Painting $4,500 -- 9 of 15 -- 10 TOTAL $57,626 With respect to cleaning, Ms Harley suggests that a new rendered brick home would have much more straightforward internal features than "Carfin" and it would be a lot easier to clean. With regard to insurance costs, Ms Harley spoke to a Mr Paul Merritt who is the Queensland Manager of Henley Homes. Mr Merritt advised her that to build a new two-storey brick house would cost in the range of $400 to $500 per m. Working from $500 per m for a floor area of 972 m, Ms Harley says the replacement cost of the hypothetical new home would be about a fifth of that for "Carfin" and she took the insurance cost to be one-fifth of that for "Carfin". With regard to maintenance, Ms Harley also spoke to Mr Merritt who advised that maintenance costs would be between 1% and 1% of the cost of a brick house. But she has based her calculations on a brick rendered house in her cost exercise, so she adds an annual cost of $4,500 to paint the external walls. After seeking advice from a Mr Farrington (who paints for Mr Conias) Ms Harley concluded an allowance of $4,500 for painting is justified. Working on Mr Conias' maintenance costs estimate and her own costs estimate, by simple subtraction Ms Harley submits that the extra cost of maintaining "Carfin" over and above that for a normal rendered brick home would be $62,560 per annum. She capitalises this additional annual cost at 10% per annum which she suggests equates the return available from investment in a fairly safe industrial property. She accordingly calculates the cost of a sinking fund to provide for the additional maintenance costs of "Carfin" to be in the sum of $625,600. Ms Harley also agrees that the value of the subject land, if it was not encumbered by the building of heritage significance, would be $980,000. She then suggests that, to take account of the heritage significance blighting, that the unimproved value should be reduced by the capitalised additional maintenance cost of $625,600. In this way Ms Harley arrives at a valuation of $354,400 using what she calls her primary method of valuation. In support of her contention that properties with heritage significance are difficult to sell, Ms Harley told us that a heritage listed property at 5 Ludlow Street, Hamilton, with six bedrooms and river views on a 913 m site sold for $585,000 on 24 December 1997. Not even two weeks later, 11 Sefton Road, Clayfield, sold for $592,000. 11 Sefton Road has an area of only 404 m and it has a four-bedroom home with no views. -- 10 of 15 -- 11 Ms Harley expressed the opinion that the only reason "Carfin" is not listed on the State Heritage Register is because of the cooperation Mr Conias has shown with the Brisbane City Council in that "he has gone above and beyond the call of duty in maintaining his property and making sure that he totally complies with what they would ask anyway". The conduct of the case for the respondent Chief Executive was in the hands of registered departmental valuer James Thomas Houghton who also provided valuation evidence in support of the departmental valuation of $980,000. Mr Houghton describes the nature of the land as falling gently from Alexandra Road to the east with apparent rear easterly views available. Mr Houghton describes the situation of the subject land to be in an exclusive residential location with substantial quality homes on large allotments. Mr Houghton has had regard to the analyses of three sales of "Residential A" zoned sites as a basis for his valuation of the subject land. As neither Ms Harley or Mr Conias is contesting that this valuation of $980,000 is a fair unimproved value for the subject land unaffected by its development with a home of heritage significance, then no further discussion about the application of Mr Houghton's sales evidence is necessary. Mr Houghton commented in evidence that the ground improvements mentioned by Mr Conias and his assessment of the added value of such ground improvements has nothing to do with any heritage provision on the subject property. He says these are the types of improvements, together with what he calls the major extension which has been added to the existing "Carfin" building, which makes it a prestigious property suited for Mr Conias' own personal use and for his family, are improvements which have nothing to do with heritage. On this basis, Mr Houghton suggests that the value of them should not be even considered in this case. I certainly agree with this contention, but the problem is that the heritage significance of the main "Carfin" building would require the approval of the Brisbane City Council for alteration and/or demolition, and it appears in all likelihood that any such application would be resisted by Council. But I must say that this method of valuation by Ms Harley is not the primary method relied upon by the appellants. It is the adoption of the unimproved capital value under appeal ($980,000) adjusted for capitalised additional maintenance costs as calculated by Ms Harley which is the primary method of valuation for the appellants. -- 11 of 15 -- 12 Mr Houghton did not wish to add anything to his valuation report in evidence but to say that he believes it is not up to the Brisbane City Council to heritage list the subject property, and further that if the property had such heritage significance, then it would not be up to the Council to make the decision, it would be left to other bodies. Mr Houghton says that "no doubt Council would have an input into it, but there's a listing of heritage properties throughout Queensland that has nothing to do 100% with the Brisbane City Council". Mr Houghton quite simply says that the heritage provisions of Council were not taken into account because it must be assumed that the land is vacant for valuation purposes (s.3(1)(b) of the Valuation of Land Act) and all that can be done with the land is to put one large home on it as did Mr Conias, and "this is how the land has been valued". That Mr Houghton took this position was understandable, but subsequent events now show that his view on whether heritage significance affects unimproved value has been overtaken by the Land Appeal Court decision in Roberts, depending upon my finding as to whether the inclusion of the subject property within the Brisbane City Council records as being of heritage significance has an effect on unimproved value as was found to be the case in the State Heritage listed property of Roberts. Now having already referred to the decision of the Land Appeal Court in Roberts, it is now for me to consider whether the circumstances in the present case can be distinguished from those in the Roberts' case since "Carfin" is not listed under the Queensland Heritage Act 1992. I accept that, following the Land Appeal Court decision in Roberts, the listing of a property under the Queensland Act seems more onerous from a valuation point of view than the inclusion of a property within the Brisbane City Council Heritage Register as part of the Town Plan for the City of Brisbane. The disadvantage such as the possible opening of a State heritage listed property for public viewing is not involved. But in this case this is not an applicable issue. I am satisfied, and I accept the view of Mr Conias and Ms Harley, that the listing of a property within the Brisbane City Council Heritage Unit Records as being of heritage significance does have a deleterious effect on the value of that property as it is most likely that any application to Council for the demolition of the "Carfin" house or for a substantial alteration to the structural integrity of "Carfin" would be refused. I am fortified in coming to this conclusion by the only evidence on the point in this case and which was provided by Mr Conias and Ms Harley. -- 12 of 15 -- 13 Having come to this finding, it remains for me to consider the effect which the incorporation of "Carfin" within the Heritage Council records has on the unimproved value of the subject land. Although I have considerable doubt about the accuracy of the annual maintenance costs provided by Mr Conias (in respect of painting I rather feel they include capital costs as part of the restoration and extension of "Carfin" rather than the annual maintenance costs), I am simply left with no other evidence on the point. I accept that the additional annual costs of the maintenance of "Carfin" over and above those for a rendered brick home is $62,560 per annum. But as in another case heard at the same sittings of the Court involving the determination of the unimproved value of land upon which an Australian Heritage Listed property is erected - reference AV97-274 - NM and AM Cooke v. Chief Executive, Department of Natural Resources - I am not satisfied that any diminution in the value of the "Carfin" property due to its heritage significance is confined, as Ms Harley suggests, to the land value alone. It is to be absorbed into the value of the property since any deleterious effect which is caused by heritage significance affects the value of the property as a whole - the land, the "Carfin" home, and the ground improvements. Now as in the Cooke case there is a problem in that I do not have conclusive evidence as to the value of the "Carfin" as a whole unaffected by the heritage significance factor. There is evidence of a valuation of $3,200,000 by Knight Frank, with which Ms Harley agrees, as a property with heritage significance. But I do have evidence of the replacement value of the "Carfin" house in the sum of $2,510,000. Now since the restoration and/or renovation and extensions made by the appellants have not been long completed, I am prepared to accept that the value of the "Carfin" home as at the relevant date for this valuation (1.10.96) unaffected by the heritage significance factor, is $2,510,000. In the absence of evidence to the contrary, I adopt for the purpose of this decision the only evidence I have that the added value of the ground improvements at "Carfin" is $300,000. I also adopt the opinion of Mr Conias and the valuation experts in the case that the unimproved value of the subject land, unencumbered by the heritage significance factor, is $980,000. By simple addition, it follows that I find that the market value of the "Carfin" property as at 1 October 1996, unaffected by the heritage significance factor is: Land Value $980,000 "Carfin" home $2,510,000 -- 13 of 15 -- 14 Ground Improvements $300,000 Market Value $3,790,000 Now I am conscious of the evidence of the valuers and Mr Conias about the value of the property being $3,200,000 as being a heritage affected property. But I feel it is open for me to find for a value of $3,790,000 for the property unaffected by heritage blight on the basis that the appellants paid $1,000,000 for it in 1988 and they have expended in excess of $3,000,000 on demolition of the nursing home structural improvements, on the renovation and extension of the "Carfin" home, and on the ground improvements. The next and final exercise I should undertake is to apportion the capitalised loss of $625,600 in the value of the property between my finding as to the value of "Carfin" as a whole unaffected by heritage significance factor, and the agreed unimproved value on the same basis. But before so doing I might say that I adopt this method of assessment notwithstanding that the ground improvements are, as suggested by Mr Houghton, to a significant extent at least, only the type of ground improvements which would normally be associated with the development of a prestigious residential site. But the heritage blighting is caused by the heritage significance of the "Carfin" home, and this blighting, in valuation terms, as aforesaid, must relate to the land and all improvements on the land. I apportion the loss in capital value of the property as to land value as follows: $980,000 (unimproved value) x $625,600 (capitalised loss in the value of the property) $3,790,000 (the unlisted value of the property) This calculates to a sum of $161,764 - or 16.5% of the unlisted land value. Now as was noted in the Cooke decision, this diminution unimproved value factor (16.5%) considerably exceeds the finding of the Land Appeal Court in Roberts (10%) but, unlike the Land Appeal Court in Roberts, I consider I have sufficiently substantive evidence upon which to base a finding. But before proceeding with the final step of determining unimproved value, I should comment that Ms Harley's unimproved value of $354,400 is manifestly too low given the quality of the site, its area and its prestigious location, notwithstanding the effect heritage significance has on the value of the land. I propose to use as a basis for my finding a rounded-off diminution factor of 17.5% from an unlisted unimproved value of $980,000. This calculates to an unimproved value of $808,500, which sum I further round off in accordance with the -- 14 of 15 -- 15 Department of Natural Resources' computer-assisted valuations rounding-off scale to $810,000. Accordingly, the appeal is allowed, the determination of the Chief Executive is set aside, and the unimproved value of Lots 1 to 3 on RP 70591, Parish of Toombul, is determined in the sum of Eight Hundred and Ten Thousand Dollars ($810,000). CH CARTER MEMBER OF THE LAND COURT -- 15 of 15 --